November 2014

Tuesday's stall precisely at the 1204.60 midpoint pivot shown implies that December Gold will achieve q minimum 1228.40 if and when it pushes past the resistance. You should trade with a bullish bias for now, using entry opportunities on the lesser charts to get aboard with reduced risk. The easiest trades lately have come from 'mechanical' entries. In this case, that would imply buying on a pullback to 1204.60 after it has been decisively exceeded to the upside.  A stop-loss of $800 per contract would obtain at that point -- far in excess of what we would ordinarily abide.  One way around it is to pick one's entry spots on ABC patterns of much smaller degree. Another would be the use of a timed buy-stop in the manner taught in the Hidden Pivot Webinar.

Index futures were subdued Tuesday night after coming within a hair of some key rally targets that I'd flagged here earlier. It will be no great surprise if they pull back from these levels, only to come roaring back with another crazed upthrust before the week is over. Even so, we've grown accustomed to treating each new record high as an opportunity to get short, especially when the high closely coincides with an important Hidden Pivot target. If you want to see how much higher the S&Ps could go if they decisively exceed this latest target, check out the E-Mini tout for today and the chart that accompanies it.

During yesterday's impromptu session, I suggested shorting this vehicle at day's end, but only to those who were prepared to monitor the position overnight. The 2055.25 target was effectively reached with an intraday high at 2054.00. For all we know, this could be the ultimate top of the bull market begun in March 2009. It's equally possible, of course, that the futures could be bounding blithely higher by the time you read this.  Were that to occur, I'd have to infer that the 2115.50 target shown is in play, implying yet another thousand points of upside for the Dow Industrials.  This seems incredible to me, given that corporate earnings have begun to falter. Permabulls have been arguing for years that per-share earnings growth has justified the runaway bull, even if a significant piece of this growth has been bought by companies shrinking their floats via stock buybacks. In any case, and most immediately, if the moderate weakness in evidence Monday night starts to snowball, we'll look for a way to get short Tuesday on-the-fly. Stay tuned to the chat room if you're interested. _______ UPDATE (11:04 a.m.): Since I have reports from traders who got short yesterday, I am advising covering half of the position at current  levels,  tying what remains to a 2049.75 stop-loss. For purposes of tracking guidance, I will assume a short position of two contracts with a profit-adjusted cost basis of 2068.00. _______ UPDATE (9:06 p.m.): Based on my instructions, traders should have exited on the spike to 2050.50 that occurred with two hours left in the session. The theoretical profit on the position would have been around $1750.  If you stayed short, an 'impulsive' stop-loss for today would imply bailing out only if the futures surpass Tuesday's record-high 2054.00.

The markets have settled into a pattern that has become all-too-predictable:  nuts-o on Fridays, based on whatever headline is available to trigger panic; and then, on Mondays, a lapse back into tedium. The obvious cause of this dynamic is that heavy bets anticipating volatility on Fridays is being unwound on Mondays. It has gone on for long enough, however, that we shouldn't expect it to continue for more than another week or two, if that long.  And speaking of volatility, subscribers should take a look at the Jackpot Bet described in today's Alibaba tout. The stock is a coiled mamba, but I still think the play I've suggested could be great fun.

The Bahb-ster has taken a breather lately, but there shouldn't be much doubt about which direction it will head on the next thrust. This is a coiled rattlesnake that might be fun to play with, and so I'll suggest a Jackpot-type bet, as follows: If the stock pulls back to the 112.31 midpoint pivot in the first hour of Tuesday's session, try to buy four Nov 22 118 calls for around 0.35. I'm guessing they'll be trading for around that much, but you can adjust your bid on-the-fly, based on a price that looks do-able as BABA closely approaches the pivot.  _______ UPDATE (10:33 a.m.): Check the chat room -- as you always should -- for some very substantial price adjustments that were made on-the-fly.  Officially, I'll record 117 calls bought for 0.30 and 118s for 0.25.  Please note that a 108.98 target is in play -- an extreme anomaly, considering the broad averages are trading moderately higher today. _______ UPDATE (November 19, 10:50 p.m.): The calls are a distant longshot at this point, but don't give up on them, since this stock can easily move $5-$6 in a day.

The futures look to be consolidating for a push to as high as 1228.40 over the near term. My hunch, however, is that the implied thrust will start from a lower low than the 1180.80 point 'C' shown.  This means night owls who want to get aboard should wait for a marginal breach of 1180.80, then be ready to buy-stop themselves into the trade on an entry signal that would be tripped exactly 12 point above the new low. This is intended as a 'timed buy-stop' entry, since there can be no justification for abiding theroretical entry risk of more than about 0.50-0.70, no matter what your intentions. Using this tactic, you should stay with the trade only if it goes into the black immediately after you enter, and take a partial profit early in the trade. _______ UPDATE 10:40 a.m.): Gold took off last night without the fake-out pullback I'd expected.  In retrospect, the best way for subscribers to have caught the trade would have entailed using the 'timed buy-stop' tactic described, but at a slightly higher price.

A modest, 2055.25 target that was put in play two weeks ago remains viable, even if progress toward it has mimicked that of a turtle trying to reach the other side of a two-lane highway. I won't proffer any trading strategies for Monday night, since the futures have been oh-so-coy in courting the various 'levels' associated with the target. Sunday night they came down to the precise 2025.25 midpoint pivot before embarking on a feeble, 15-point rally that moved too slowly to be tradable.  One of these nights the futures will simply pop to 2055.25, and that will be that. Trading opportunities from both the long and short side are implied, but I'll leave it to those of you with more patience than I to seize the moment.

Index futures glowered with menace Sunday night, promising a week of nervous price adjustments intended to keep the markets in step with these appallingly interesting times. Political scandal will always be there to provide us with comic relief, but any week that begins with the beheading of yet another American is bound to be less than stellar.  The New York Times, pretending not to notice any of it, has hidden the Jonathan Gruber scandal, which could bring down Obamacare, in a way that could only be described as bizarre. Search the Times web site for 'Jonathan Gruber' and you'll see that the most recent and important story that had his name in it concerned a mixed-drink recipe. Nobody could make up stuff like this.

Using call options, we've been trading an ETF proxy for this vehicle, TLT, but have been on the sidelines lately waiting for the correction from mid-October's spike high to run its course. You can just look at the chart and sense not only that recent price action looks like consolidation for an eventual move higher, but also that it could take more time for the process to finish.  Assuming the point 'C' low of the pattern holds -- an outcome which  I do not strongly expect at the moment -- the next major thrust would put the futures on course for a flight into outer space. Specifically, a Hidden Pivot target at 152^27 would be in play, implying new record-lows for long-term interest rates. Traders should approach entry with a bullish bias once 143^13 (green line) is touched, and to be even more aggressive following the breach of the 'midpoint pivot' at 146^18.  Both of those benchmarks could change if the futures head lower first, but that would not alter the very bullish look of the chart unless 140^08 were exceeded to the downside.